Good morning, Mr. Chair and members of the committee. Thank you very much for inviting us to participate in today's hearing.
I have here with me today Superintendent Stephen Foster, who oversees our commercial crime branch at our headquarters in Ottawa, and Inspector Dave Rudderham, who oversees our commercial crime unit in the city of Winnipeg. I am the director general for the RCMP's financial crime programs.
I'm pleased to have this opportunity to say a few words about financial crime, our involvement related to income-tax-related investigations, and our ongoing relationship with the Canada Revenue Agency.
In today's complex and increasingly global environment, criminal activity often involves multiple jurisdictions. Criminals today are becoming much more sophisticated in disguising their illegal profits without compromising themselves. Criminals are now taking advantage of the globalization of the world economy by transferring funds quickly across international borders. Rapid developments in financial information, technology, and communication allow money to move anywhere in the world with speed and ease, making it much more difficult for law enforcement scrutiny and providing criminal organizations new financial avenues. As a result, addressing increasingly complex transnational financial crimes requires law enforcement to work closely together with domestic and international partners.
Generally, tax evasion involves individuals or companies attempting to conceal income earned from taxation authorities. This same increasingly connected global environment also creates significant opportunities for tax evasion-related activities. In August 2010, Bill C-9 amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, making tax evasion a designated predicate offence for money laundering. In other words, tax evasion is a criminal offence that, if committed, could give rise to criminal proceeds—the evaded taxes. In addition, laundering the proceeds of tax evasion will also be a money laundering offence.
Unlike the Canada Revenue Agency, the RCMP is not a primary recipient of tax evasion information. CRA has its own investigative capacity and is well positioned to investigate tax evasion. As a result, the RCMP generally does not investigate income tax evasion related to legitimate funds earning income offshore.
When the RCMP does identify activity related to income tax matters, it is almost always incidental to an investigation we are conducting on another matter. When feasible, matters are referred to the CRA for their action.
The RCMP commercial crime and integrated proceeds of crime programs have long had a close working relationship with the Canada Revenue Agency. The working relationship between the CRA and the RCMP commercial crime program dates back to the early 1970s, and the integrated proceeds of crime units have been working closely with the CRA since they were created in the mid-1990s. The RCMP may share information with the CRA; however, the RCMP only shares information with the CRA when it is permitted by law and the sharing will not jeopardize an ongoing criminal investigation.
Information sharing between the Canada Revenue Agency and the RCMP as it relates to income tax matters is generally from the RCMP to the CRA. The Canada Revenue Agency does not generally make referrals to the RCMP. When requested by CRA investigators, the RCMP does provide assistance to them. In some instances, tax-related information may be provided by the Canada Revenue Agency to the RCMP pursuant to a judicial order under the Criminal Code or after charges have been laid in relation to a criminal investigation.
Through the RCMP integrated proceeds of crime program, the RCMP regularly shares and refers information to the Canada Revenue Agency regarding tax-related matters. Between March 1999 and March 2009, the RCMP proceeds of crime program made referrals to the Canada Revenue Agency that resulted in federal tax assessments totalling approximately $145 million.
In preparation for this appearance, we conducted a search of the RCMP's occurrence records and found that for the same 10-year period, from 1999 to 2009, the RCMP initiated 542 files related to the Income Tax Act. These files pertained primarily to providing assistance to the Canada Revenue Agency.
Within the RCMP financial crime program we currently do not have any investigative resources dedicated solely to tax evasion. However, with the recent legislative amendments I just mentioned, the future may see the RCMP becoming more involved in investigating tax evasion connected to proceeds of crime and money laundering.
As I indicated earlier, the changing environment is one of the greatest challenges we face in our efforts to combat all types of financial crime. The growing sophistication of criminal activity is abetted by the same techniques and technologies that spur legitimate opportunities for business.
As Canada's national police service, the RCMP recognizes that it has an important role to play in combatting financial crime and helping to protect Canada's economic integrity.
Mr. Chair, honourable members of the committee, that concludes my prepared remarks. I would now be happy to answer any questions you may have.
Thank you.